The View from 5th Avenue

The print was barely dry post FOMC yesterday when regional bank PacWest (PACW -50.6%) decided to announce they are looking at strategic options. Those words these days equal almost certain termination in the banking sector, and obviously dampens investor sentiment. To add to the misery, headlines that TD (TD +95bps) and First Horizon (FHN -33.1%) called off their merger, and a FT report that Western Alliance (WAL -38.4%) was also seeking strategic options (“vehemently” denied by WAL), pushed in…

The market is in a delicate position, and there is no smoking gun or white knight that can grace the airwaves in one afternoon and sweep us to the promise land overnight. I say this also with the recognition that the S&P is +6.5% YTD and the Nasdaq +15%. However, this is not a straight-line-up market and we are imbedded within a slow, gradual, and arduous process whereby we are navigating our way out of exceptionally high inflation that is the result of a very prolonged period of zero interest…

Things got a little bit more hair-raising today with the VIX +10.3% and KRE, the regional banking ETF, trading down -6.3% in what looked like a bit of a panic move. PacWest (-28%), Western Alliance (-15%) and Zion’s (-11%) all tanked, which proved that the cleanup of FRC did not “stabilize the system” as Jamie Dimon had promised. It seems investors are focused on funding costs rising and the regulatory environment only getting more difficult from here, rather than the rescue mission. To further…

First day of May! What did you expect? Elevated trading volumes, endless news feed and the S&P flying through 4200 on a day where most of the European and Asian markets were closed. Nope! Instead, we got exactly what we knew was coming, low volumes and major US indexes little changed. On the bright side, the S&P 500 futures briefly broke above 4200 during the afternoon session for the first time since February, so we have that going for us. A rainy weekend here in the Northeastern US set the th…

We are perpetually stuck in a low volume, low volatility environment (the Vix made a fresh multi-year low today), with major indices in a range, and everything dictated by mega cap tech. The SPX is stuck between 3800-4200 stillll, the 10yr is stuck between 3.32-3.65%, $ now above Feb lows and oil is doing nothing much (it did have a 2.6% pop today, but still finished the week with a loss). The question is – what will be the driver to break us out to the upside above that seemingly Teflon 4200 l…

Does it ever feel like we’ve been here before? Well, spoiler alert- we have! Just 2 days ago, in fact, and a few times earlier this month, and back in Feb, and… While recessionary worries, debt ceiling concerns, and a faltering FRC (+8.8%) have overshadowed an earnings season kicking into full gear, don’t blink because TECH has come to save the day! For today, anyhow. and we’ll see about tomorrow. The terrible-breadth-80%-double-down-days we just endured are now in the rear-view mirror, and…

Hopes that Big Tech earnings would drive US indexes out of their current ranges faded today. After another round of mixed earnings, traders looked to Microsoft and Google to lead them through the session, but it was not enough. Poor breadth in the S&P acted as an anchor. With back-to-back 80% down days, early session gains were fighting against a tide moving heavily against them. The S&P was not able to hold on, but the NDX was able to keep its head above water into the close. Semiconductors re…

Markets have been trying to fool investors into thinking that the lack of volatility is a positive sign. But the underlying cause has been more derivative led than fundamental, and today’s trading served a reminder that headwinds remain. Earnings and economics have taken over with a side of debt ceiling debate, putting investors into a classic risk-off mood. Dallas Fed missed yesterday (following a weaker Phili Fed last week) and the Richmond Fed followed suit (-10 vs estimates of -8) today. Co…

Over the weekend I stumbled onto a show I’d heard little about, but immediately binged from start to finish. The concept was so brilliant, the execution so masterful, that I promised I’d tell everyone I know to watch it immediately. And then I remembered about this handy little vessel to help relay that message. The show is Jury Duty on Amazon Prime and you will love it – if not, we may not be able to be friends. Interestingly, it was the media/TV field itself that provided a fair bit of the da…

Well here we are again, singing the same ole song. The indexes continue to be stuck in their ranges and there doesn’t seem to be an end in sight. I am starting to feel a little like Phil (Bill Murray) in Groundhog Day. Main US indexes fought between positive and negative returns for the entire session before closing slightly in the green. Traders continue to process mixed earning reports and light economic data. S&P Global US PMI was released this morning with manufacturing (50.4), services (53…